Rehypothecation is pretty far away from "paper derivative made of nothing" -- it may not be "contracts as code" level of assurance, but it is "the long arm of securities and commodities law" level of assurance, which many would argue is the more critical level you would want for your assets. My stance on this is neutral and I think both sides have a point, but I think it's a little hyperbolic to call that a "paper derivative made out of nothing."